New financial scams targeting seniors are popping up all over the place these days, while law enforcement and government, including the new Consumer Financial Protection Bureau, are working diligently to eliminate these growing crimes.
Bob Blancato, the national coordinator of the Elder Justice Coalition, says, “I call it the ‘scam du jour syndrome. New ones pop up on a regular basis.” Nearly every day, a senior is approached with some sort of scam aiming to tap into their retirement funds. From 2008 to 2010, losses from elder financial fraud jumped from $2.6 billion to $2.9 billion, a 12% gain. Here are 9 of the most common scams targeting seniors these days; make sure you don’t fall victim to them:
Grandparent scams: Oftentimes, scam artists target victims by using the adoration for their family against them. For example, “Many will call an older person, whispering ‘Grandma?’ and mumbling so that the older person will volunteer a name. Once they’ve established an identity, they claim to have lost their wallet and/or passport in a foreign country or to have been arrested and in need of bail money.” Of course, the caring grandparent is happy to help their grandchild out, and the scammer on the other end of the phone gets what they set out for – money from an unsuspecting elder.
Medicare fraud: Since Medicare is universal for all U.S. citizens age 65 and older, con artists have an “easy” target. Sometimes, they will pose as Medicare representatives in order to get personal information from candidates, or will set up makeshift mobile clinics and provide bogus services to the elderly, bill Medicare, and pocket the money.
Bogus sweepstakes: In many sweepstakes scams, you would hear something like, “Congratulations, you’ve won $10,000!” but then would be asked to wire some of your own money for, “insurance, upfront taxes or shipping and handling fees,” in order to claim it. If the contest is legitimate and you have truly won a prize, you won’t be asked to pay for it.
In another version of this scam, you would receive a check in the mail for an odd amount like $13,500. The check would be accompanied by a letter congratulating you on you recent winnings as well as instructions to deposit the check in your bank account and wire the extra $3500 to cover taxes and other fees. By the time your bank informs you the original check for $13,500 was not a good check, the wire has already cleared and you have just lost $3500.
Dialing for dollars: Be careful which telethons you choose to participate in, as many of the so-called “charity” phone donation pushes will catch the heart of a senior, but not contribute the money to a good cause, or will only give a small percentage to the advertised cause.
In addition, another dangerous call is a credit card scam, often made in the morning or at night when the victim is off guard. “This call alerts individuals to the fact that a card has been stolen or used in some way that has affected their credit score. The caller then tries to confirm sensitive financial information, including address, and credit card and Social Security numbers,” according to MSN Money. A bank will never call you asking for personal information, so be sure to hang up and call your financial institution’s real telephone number if you have concerns about your account. They will tell you right away if there is a problem, and will then have you confirm your identity.
Unsolicited home improvement: In this type of scam, a senior is approached by a repairman who says their roof is in dire need of repairs, or the siding on their house is peeling back – anything to raise concern in the homeowner, who then signs a contract with the worker to complete said repairs. Unfortunately, more often than not, the final bill ends up being much higher than quoted.
Home loan scams: The two biggest home loan scams making the rounds these days are loan modification scams and forensic loan audit schemes. According to Annette Kirkham, senior attorney at the Fair Housing Law Project, “With home equity virtually nonexistent for a large percentage of the population, scammers are targeting owners’ cash, rather than the title.” Home loan modification scammers often target victims at senior centers, offering to help renegotiate their mortgage for lower payments, in exchange for an upfront fee. Then they take the money from these unsuspecting victims and provide nothing in return.
Forensic loan audit scammers require a significant amount of money up front – anywhere from $10,000 to $50,000 – in order to uncover fraud in the loan-origination process, thereby allowing the “attorney” to file a suit on behalf of the homeowner forcing modification. However, the suit doesn’t happen and the individual ends up losing a large chunk of their savings.
Power of attorney scams: These scams are some of the most hurtful, because they often involve someone close to the senior, such as a good friend or family member. The senior would assign legal authority to another person in order to manage their financial affairs. Unfortunately, this can lead to desperate relatives and acquaintances draining their elder’s bank and investment accounts. Always consider splitting this responsibility between two people or family members to safeguard against this happening to you.
Knock-knock thefts: This scam has been popular for decades running; someone comes to the door, posing as a representative of some sort – utilities, law-enforcement, charity, etc. – and distracts the victim while their partner enters the residence from another entrance and ransacks the house, grabbing cash or other valuables.
There are many ways to avoid falling into these types of scams, starting with not giving any personal information to someone who contacts you, purchasing policies through a telemarketer, or letting strangers into your home. One of the best way to protect yourself is to pay attention to your gut. If you get that feeling in your gut that tells you something just doesn’t seem right, don’t do it, or contact someone you trust and get a second opinion. Unfortunately, we have witnessed several individuals falling victim to scammers. However, we have also not only helped to protect many of our clients and friends from would be scammers, but we have been able to assist authorities in the investigation, arrest, and conviction of deceitful individuals. If you are concerned that someone has contacted you trying to scam you out of money, contact local authorities immediately.